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Apartment REITS selling more than buying ...

Good article that discusses the fact that MAA (a large multi-family REIT) is selling more apartments than ever before in their 21 year history. Clearly the cap-rates in the multi family space are making it more attractive for these guys to be sellers rather than buyers.

This reinforces our viewpoint that a rotation out of multi family and into office and retail assets is underway. We continue to see high quality office and neighborhood retail (which is really space occupied by small medical and service companies) with cap rates in the 8 to 9 percent range, vs. the 5.50 percent cap rates in multi family.

From the article:

“We’re selling more properties this year than we’ve ever sold as a public company in our 21-year history,” he said. MAA has sold almost $750 million of real estate in the last five years. Bolton said he expects to continue to see a “healthy” level of asset recycling given current pricing levels and demand from investment capital.

MAA has sold 18 properties so far this year with three more properties expected to close in the third quarter.

“We may still be at an elevated level of disposition activity next year, depending on market conditions, but at this point we’ve completed a lot of the transformation we were after. Clearly, capital is very attracted to apartment real estate these days,” he said.

Full Article here: https://www.reit.com/news/videos/apartment-reit-maa-pruning-portfolio

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Prudent Growth Partners, LLC  (2017)    1829 E. Franklin St, Suite 800-F, Chapel Hill, NC 27514  (919) 590-4119